My Startup Experiences

Submitted by tomo on April 5, 2013 - 10:34am

I've been involved in start ups for over a decade now. During that time I've worked for companies in varying stage of development. Not all of them were startups. But how can you tell if it is or not?

Hewlett Packard is a huge corporation with over a hundred thousand employees and dozens of branch offices around the world. That's not the typical image of a startup, is it? But HP started out as the quintessential Silicon Valley "garage" company. I joined HP at the offices of a supercomputer company called Convex, a startup that had been acquired by HP.

Soon after I moved to Ann Arbor to work for a real startup, a small company with just dozens of employees, backed by venture capital as well as companies like Cisco, producing network security products that had never existed before, and we were discovering just how many people were willing to throw down serious amounts of cash to buy such products. We got paid in three things: fun, money, and stock options. I watched this company grow to over 150 employees and lots of millions of dollars of annual revenue. Eventually this startup exited via an acquisition. This was also part of the business model.

Since then I've been a co-founder of a few startups.

But actually my first company or tech "startup", the first registered company with my name, was founded almost 15 years ago during the first dot com boom. It started out as a web hosting company. But we soon discovered a niche in selling game servers to groups of friends who wanted to rent private servers to play their games on. It was a nearly untapped market and we knew how to run fast and efficient servers for a market that didn't know or care how and get them on fast but affordable networks. This was a formula for happy customers and we started growing fast. We were "bootstrapped" which just meant that we were paying for the expenses out of pocket. There was no bank that would loan us money for this idea. This meant using credit cards to buy hardware to build and rack more servers as fast as possible. Any monthly profit was immediately spent on hardware. For an Internet startup, we were awfully capital intensive. In the end this led to our downfall as we couldn't manage our hardware needs dynamically in the olden days of the pre-Amazon elastic cloud computing era. Just as we started growing fast, a bump in the road caused us to flip into a ditch after which we were down a lot of money and faced with a number of problems at the same time. When business is good, it almost doesn't matter who your partners are. When business is bad, you'll realize how important your business partners are.

More recently though, I worked for an e-commerce company in San Francisco with 10 employees. Being a small company making money through technology and being in San Francisco doesn't automatically make you a startup. This wasn't a startup.

Not all companies are startups. Not all technology companies are startups and not all electronic commerce is either. Having fewer employees doesn't make you more of a startup. This company was profitable and growing, but growing slowly within a somewhat niche market that was probably tapped out.

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Roosevelt (not verified)

I couldn't resist commenting. Well written!

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